At 3Dmatic Atelier, we absolutely love JVs! Every different JV comes with unique situations, unique goals, unique challenges, and unique opportunities. Successfully navigating these peculiarities and emerging with successful outcomes for all parties that often surpasses anticipation of our partners, is an adventure we have grown quite exceptional at.
But if Real Estate JVs are such exciting adventures, why do so many people fail at it, or not meet their expectations or full potential? The truth is JVs have pitfalls that require experts to circumnavigate.
Let us explore one such pitfall.
If you own a 1200sqm plot in a prime location, you could decide to just sell it off, get paid and walk away. Alternatively, you could choose to put up a property on it to rent or sell with potentially higher returns. This option has its advantages- and disadvantages too.
A third- far better option- would be to get into a JV. And this is where things may become tricky- the question of what kind of property to put up.
One Duplex
A 1200sqm plot can take an expansive duplex with sweeping lawns. And that would be good. But good is the enemy of great. Except that property is in an upscale area, there is likely to be quite some difficulty offloading the property and you may not get full value or returns.
So why settle for good when you can get better?
Three Duplexes
Properly managed, that same 1200sqm plot can comfortably sit three luxurious stand-alone duplexes. And, while each duplex unit would cost less to sell, lease or rent than the original single duplex option, combined, all three would bring in significantly higher returns. But there is another advantage. One duplex in a JV can’t be shared between parties in a JV. Two or more, though, can be.
This is a far better outcome. And that’s good enough.
But good enough is rarely ever good enough. So, why settle with good enough when you can get an even better deal?
Five Terrace Duplexes
Five terrace duplexes (or an apartment complex with 10 no.s 3-bedroom units) could sit on 1200sqm. As we have shown through our iconic designs for different projects, terrace duplexes or apartment complexes do not have to be bland and basic. They can be truly aspirational- because people want homes they can take immense pride in, not houses to sleep in. A home that’s both functional and visually appealing becomes quickly over-subscribed, which means astronomical returns on investment.
In summary, when it comes to JV, one is better than none; three is better than one; and five (or eight) is better than three. More importantly, however, going into a JV with a partner with reliable data from years of experience as well as unique skill sets, can often be the difference between a successful Joint Venture or a failed misadventure, because they know what to build and how to build it to bring the highest returns in the shortest possible time.
